Financial Institutions have increasingly come to rely on what's known as "risk-based credit scoring" to determine your credit worthiness. These scores are suppose to measure how likely you are to repay a debt. They are a key factor in determining if you can get credit, and at what cost.

Fair Isaac Company developed theses scores over forty years ago and most credit bureaus use their "scorecard' to create credit scores for individuals. A score is defined as a number that tells a lender how likely an individual is to repay a loan, or make credit payments on time. Fair Isaac's software calculates your score on the basis of data collected in five basic categories: payment history, amount owed, length of credit
history, new credit, and types of credit used. Fair Isaac has revealed how each of these factors is weighted and how you can improve your score.

" Payment History (about 35% of total score): How have you paid your debts in the past? Specifically, how late have your payments been, how much was owed, how many late payments, and how recently they occurred are all taken into account. According to fair Isaacs, a 30-day late payment made just a month ago will count more than a 90-day late payment made 5 years ago.

" Amounts Owed (about 30% of total score) How much is too much? While owing a lot of money on many accounts might indicate that you are overextended, you score will not necessarily be harmed by large outstanding amounts. What is important is how many accounts have balances and how much of the total credit line is being used on credit cards and other "revolving accounts."

" Length of Credit History (about 15% of total score): How established is your credit? How long have your credit accounts been established? How long since you used certain accounts?

" New Credit (about 10% of total score) Even though this category makes up only about 10% of the total score, applying for too much new credit is probably one of the easiest ways for people to inadvertently harm their credit score. Here the scoring takes a look at how many new accounts you have established, how long has it been since you have opened a new account and how many recent request have been made by credit
reporting agencies.

" Types of Credit (about 10% of total score) Is it a healthy mix? This factor takes into account your mix of installment loans, mortgages, retail accounts, credit cards and finance company accounts.

The Cincinnati Police Federal Credit Union is dedicated in educating our members about their credit score. If you have questions or concerns please contact us at 381-2677, so that we can provide you with the answers and solutions you need.

The Cincinnati Police Federal Credit Union's mission is to protect our member's investments and serve they're current and future financial needs. Our mission is to help our members financially and enrich their lives by doing so. We understand that sometimes members can run into financial difficulty and the ease of filing bankruptcy is to appealing---- even though it may not be best for the member. Please remember the
Cincinnati Police Federal Credit Union is here for you. We may be able to solve a problem by providing a loan to consolidate debt. Or if a loan cannot be done, we are more than willing to help you work on a budget that will salvage you credit rating and get you back on track. So please call your Credit Union (513) 381-2677 before considering something drastic that may affect you for a very long time.